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Megatrends leading the path to the future of construction – Urbanization and Prefabrication

Megatrends are significant, long-term and typically interrelated phenomena that evolve gradually. While they have a substantial impact on our future, they do not foretell it. Rather, they serve as a valuable framework for discussion when looking at changes in the world around us, such as in decision-making processes or strategic planning. Gaining insights from megatrends helps to both understand and shape our common future.

“Urbanization is the increase in the proportion of people living in towns and cities. Urbanization occurs because people move from rural areas to urban areas.”

 - European Environment Agency, definition of urbanization


Construction prefabrication involves the manufacturing of building components, such as walls, floors and roofs, in an offsite factory setting. The components are transported to the construction site and assembled like building blocks to create a complete structure. This method offers numerous advantages over traditional construction methods, such as cost savings, speed and efficiency, and sustainability.”

 - Utilities One, definition of prefabrication


“At Peikko, we find industry trends very important and closely follow the weak signals. We aim at rapidly acting and leading the industry by establishing new ways of working. Our pilot projects and bold innovations do not remain unseen, and as an industry forerunner, we can engage other industry players to further evolve the market together. As we are known for our long-term commitment, we have gained the trust of our stakeholders. We walk the talk”, says Petri Suur-Askola, Peikko’s Business Director, Connections.


Expanding urban areas

The world is becoming increasingly urbanized. Today, more than 80% of global GDP is generated in cities, and some 56% of the world’s population – 4.4 billion people – live in cities. The urban population is estimated to more than double its current size by 2050, at which point nearly 7 out of 10 people will live in cities. Almost 90% of this increase is concentrated in Asia and Africa. The rise is due to natural population growth and more domestic and foreign migrants moving into cities.


Cities play a key role

According to the Sustainable Urbanization Policy Brief, urban centers currently account for two-thirds of global energy consumption and more than 70% of greenhouse gas emissions. Innovation in urban infrastructure and technology is essential when addressing this issue.

The construction of environmentally friendly, resilient and inclusive cities requires comprehensive policy coordination and strategic investment decisions. National and local governments and companies play a crucial role in shaping the trajectory of development. Integrating environmental considerations into the building industry is essential, given that the embodied carbon emissions of structures contribute significantly to the overall environmental footprint.

“Today, an increasing amount of our R&D efforts is focused on sustainable development. For example, we have recently developed the PUUCO® product family for concrete-timber connections for more ecological construction. Above all, the needs of our customers always come first, now and in the future”, says Jaakko Yrjölä, Senior Manager, Sustainability & Research at Peikko.

For cities to sustainably grow, affordable housing is one of the prerequisites. Besides carefully selected and optimized material use, affordable housing is a result of prefabrication, scalable solutions and sustainable supply chains.

As urban land is becoming scarce, there is increasing high-rise construction. In terms of solutions, materials and construction methods, this tendency drives the development of the construction industry.

“Many of our existing products and solutions also perfectly fit high-rise construction. In more demanding projects our goal is to find or create a solution that will help our customers to finish their projects. Our vast research and educational network enables us to do this; we develop the industry always in collaboration. Sharing insight, testing and studying is the path to optimal outcomes”, says Suur-Askola.


The construction industry contributes to a greener future

There are several ways in which the construction sector can contribute to more sustainable and environmentally friendly urban development:

  • Green building design (sustainable design principles, energy-efficient materials and technologies)
  • Energy efficiency (energy-efficient construction methods and materials, renewable energy sources, smart building technologies)
  • Material selection (eco-friendly and recycled materials, locally sourced materials)
  • Waste reduction and recycling
  • Certifications and standards (green building certifications, following sustainable construction standards)
  • Prefabrication (also known as offsite building)


“At Peikko, we see the industry changing in many ways in the future. The materials are becoming more environmentally friendly; so-called green, or recycled, steel is already manufactured with green energy. Low-carbon raw materials are becoming more common, and for instance, the concrete composition will surely transform which will challenge the entire industry. Paying attention to the emissions of raw material manufacturing will drive a more energy-efficient tomorrow”, says Suur-Askola.

“And, while the industry aims to cut manufacturing emissions, we are also studying the alternatives. Already several pilot projects are aiming to use the parts and structures of buildings at the end of their lifespan for new buildings. This approach requires new working methods and will challenge our way of thinking. For the time being, the practicalities in question include who will receive the old parts, decide their price and be responsible for reusing them. Much remains unanswered, but the tendency already exists. From the authorities’ perspective, the design for disassembly and circularity are the preferred ways of working, but we are not there yet. This may open new opportunities for new business models”, says Yrjölä.


Prefabrication is on the rise

Prefabrication in construction offers advantages including:

  • Swift and efficient construction: Prefabricated components are crafted in a controlled environment, enabling a quicker and more efficient construction process compared with traditional onsite methods. Industry statistics indicate that prefabrication has the potential to cut construction time by up to 50%.
  • Cost-efficiency: The assembly process is streamlined, requiring fewer onsite workers. Furthermore, using standardized components minimizes material waste.
  • Enhanced quality and precision: The factory-based production of prefabricated elements ensures superior quality control and precision during manufacturing. This results in fewer defects and errors, ultimately enhancing building performance and durability.
  • Sustainability focus: Prefabrication reduces construction waste and mitigates the environmental impact associated with onsite construction activities. Modular construction facilitates the seamless integration of sustainable technologies, such as energy-efficient systems and renewable energy sources.


The advantages of prefabrication make it an attractive option for both builders and developers. Embracing this approach not only addresses conventional challenges but also propels the industry toward a future characterized by sustainability and efficiency.

Suur-Askola says: “Swiftness and a smooth workflow are at the core of prefabrication, and the bread and butter of Peikko’s solutions. For example, our bolted connections are designed for disassembly which enables modular construction and flexible buildings with longer lifespans. All you need is a bold attitude and a pinch of innovativeness to renew ways of working and create something new.”